Improving sales management of personal & homecare business unit of connell brothers company

UNIVERSITY OF International School of Business PHAM NGOC ANH THU IMPROVING SALES MANAGEMENT OF PERSONAL & HOMECARE BUSINESS UNIT OF CONNELL BROTHERS COMPANY ID: 22140048 MASTER OF BUSINESS ADMINISTRATOR SUPERVISOR: Phd TRAN HA MINH QUAN Ho Chi Minh City – Year 2016 Table of Contents Introduction Situation analysis Problem identification Causes and effects tree Problem definition 11 Problem existences 11 Causes of the central problem 12 Alternative Solution 26 Conclusion 37 Appendix 1:Questions and transcript of interview section 37 Appendix :Questions and transcript of interview section 38 Appendix 3: Questions of interview section 39 Appendix 4: Sales process 40 Appendix 5: KPI Evaluation form 42 Appendix 5-1: KPI Evaluation form 43 Appendix 6: Job description of Business Manager of Brenntag Company 45 Appendix 7: Questions and answers of customers about Sales manager’s………………… 47 Appendix 8: Questions and answer of suppliers 48 References 49 EXECUTIVE SUMMARY Connell Brothers Vietnam is one of the leading specialty chemical and ingredients distributors in the country by representing leading global suppliers and serving customer needs for raw material in a wide variety of industrial and regulated industries Personal & Homecare department (PnHC) which is the fourth business unit of Connell Bros has played an important role in the development of company PnHC team grew business average 25% to 35% annually by high experienced sales team However, after replacing sales team leader (business unit manager), sales team is unmotivated, stressful by overload of working Both sales attitude and salesforce have been changed, so business result drop behind budget It is very necessary to point out causes that affect business to improve sales team performance in order to achieve sales target of company This research will identify causes and outline the reason why sales result decreased in the first half of year 2016 Then, we can suggest appropriate solution to improve PnHC business Introduction Connell Brothers is originally founded its first office in Vietnam before 1975 Due to the U.S trade embargo i mposed in 1975, the company was compelled to postpone its operations in Vietnam When the embargo was lifted in 1993, Connell Brothers was one of the first U.S.-based distributors to return Vietnam market and opened representative office Today, Connell Brothers Vietnam is fully licensed to operate as a full service distributor with two offices in Ho Chi Minh and Hanoi Connell Brothers Vietnam is one of the leading specialty chemical and ingredients distributors in the country by representing leading global suppliers and serving customer needs for raw material in a wide variety of industrial and regulated industries With concepts of being the best technical consultants and guiding marketing trend in business development, Connell Brothers Vietnam is a trusted partner of both suppliers and customers Personal & Homecare depart ment (PnHC) which is the fourth business unit of Connell Bros has played an i mportant role in the development of company Not only succeeding in supplying chemical for multinational companies, but also succeeding in supplying chemical for local companies, P&HC is one of leading companies contributing into the success of Vietnam brand like X-men shampoo, Enchentuer, Romano, My Hao, Net, Lix, Lavox, Kanac, etc By flexible strategies, Connell Brothers has changed business policies to adapt customer requirement and market needs Changing from representative office to limited company, Connell Brothers Company (CBC) has expanded ability of supplying for varied customers with its own warehouse, effective supply chain system and flexible payment term Industry development has created not only opportunities but also threats for multinational chemical distributors like CBC CBC has met high competition with both multinational companies and local companies CBC has not been a monopoly company in supplying some special products anymore Customers nowadays have multiple choices in many distributors that they feel satisfied Consequently, the problem is that CBC should analyze its own weakness in sales management to improve competition ability in personal & homecare chemical market Personal & Homecare business Overview of personal & homecare market Market is dominated by multinational companies like P&G, Unilever, Kao, Rohto due to the satisfaction with foreign brands and attractive advertisement of most Vietnamese customers Meanwhile, local companies follow marketing trend that multinational players created due to their shortage of advertising budget They have built effective distribution channel all over countries, especially in the west or remote places where multinational co mpanies skipped by high distribution investment However, west places are potential markets that multinational companies changed their distribution strategy Table and shows increasing significant market share number of personal and homecare It proves this is a potential market that local companies should invest more Table 1: Personal care market share (Euromonitor international 2015) Table 2: Ho mecare market share (Euromonitor international 2015) Products 2011 2012 2013 2014 Aircare 361 402 439 467 Bleach 61 71 82 92 DWL 1,418 1,631 1,905 2,181 Home insecticides 608 707 809 905 Laundry 12,359 14,739 17,209 19,608 Polishes 144 164 183 206 Surface care 1,117 1,284 1,508 1,747 Toilet care 339 395 470 549 Total 16,409 19,395 22,607 25,757 Personal & homecare of CBC: P&HC is the fourth position in Connell Brothers Company Its sales revenue increases 15% annually by developing new suppliers, new customers and new products PnHC divides customers into two segmentation as personal care and salon & homecare For personal care seg ment, it supplies chemical for bath shower, shampoo skincare, cosmetics, etc For salon & homecare segment, it supplies chemical for haircare salon channel and households With its customer division, sales team can well focus on their knowledge and technical service Its sales revenue has increased from $1,7mil US to $4.4mil US after dividing into two segments for years YTD 2015 46% 54% Personal care Salon & homecare Figure 1: Sales revenue in 2015 With the economic growth of Vietnam, multinational distributors and local distributors have founded to meet market needs Chemical supply source is not monopoly by some foreign distributors like CBC Customers can buy from local distributors with longer payment term, or i mport directly from suppliers having or not having representative in Vietnam Consequently, CBC has difficulties not only with co mpetitors but also suppliers that they are working with to sustain stably Situation Analysis Sales force is very costly and effective in achieving certain marketing objectives The purpose of the sales force is to produce sales revenue and this involves the art of personal selling Hence, sales process management must give careful thought to designing and managing its personal-selling resources effectively and long term Sales process management include in recruitment, training program, salesforce supervision, evaluation, resource back-up plan, suppliers management, etc Moreover, Connell Brothers is a B2B model in chemical industry business so the role of sales manager in leading sales force how to promote new products is very i mportant Besides that, motivation and incentives policy are also two elements affecting sales performance Frederick Herxberg1 said that the best way to motivate someone is to organize the job so that provides feedback and challenge that satisfy the person’s “ higher level” needs for things like accomplishment and recognition- means doing the job intrinsically motivating Sales management, motivation, incentives are necessary factors for sustainable developing of sales force, especially sales spirit Go through business review of the first half year and sales performance, I summarized current symptoms as following: Symptoms Sales of the first half year 2016 drops 12% compared to year 2015 while sales normally increases from 2011 to 2015 Personal and homecare usually achieve company’s budget higher 10% each year However, sales result decreased in the first half of year The reason comes fro m internal and external condition: - External condition: • Market demand drop: market dropped demand due to economy difficulties, disasters affecting beauty needs Questions Answers How many key accounts are you handling? Many or not? What factor your department choose to select key customer between high revenue and strategic value? Why? Does your BUM handle some key accounts? If not, you think that he should some? Is your manager helpful? If yes, give examples How you think about your workload? Is it enough or so much? Do you focus on selling only? How you think about sales process? Is it flexible? What you think about sales management of your team? Is it good? If not, why? Are you satisfied with your job now? About work condition? Salary? Incentives? If you have interesting offer, will you leave CBC?  Interview sales team & lab team All interviewees answered in the same way: Old salesperson handle most of key accounts Key accounts is divided by revenue and potential opportunity BUM doesn’t handle any accounts I think that he should handle any key account of each department He cannot help us to decide issues from customer and suppliers well I have to so much paper work pcs to deliver goods, order goods, solve problem….logistics don’t follow PO as well as they can, so I have to Sales management is accepted, but we have to a lot of report when supplier visit, regional request, etc I feel stressed because of over workload I am finding new opportunity APPENDIX 2: Questions and transcript of interview section Questions Answers Does your job needs to so much paper  work? Can you skip paper process to faster? All interviewees answered in the same way: - Process is very complicated and waste of time I have to follow process - Supply team don’t follow PO and delivery order, solve problem when goods has problem I am tired and over load - We are overload especially in high season We have to work over hours a day We cannot relax at weekend - Manager doesn’t share work to us, conversely we have to prepare report for him - Stress is the common situation - Our job used to be good with old BUM because she can help us solve problems, work with GD so that we can focus more on selling Can you share work with other persons in your team or supply chain? Do you often have to work over time? How often you work over time? When you feel stressed? Does your manager help you to release workload? 37 Interview sales team: Do all sales person have the same over goods - I think that sales manager should learn to know what sales team are doing, what customers want to explain with GD better instead of working through us - We don’t like so many meeting but we think that sales team should have meeting to discuss what is going on - My friends are working at competitor companies They told their bonus up to month salary if budget if higher 30%, for normal cases is month salary workload? Do you think your job used to be interesting than now? Do you think that salespeople of other company have to work hard like you? Do you think that your sales manager should have market knowledge and chemical background? if yes, why? Do you usually have team meeting? Do you like meetings to share information? Do you know incentives of another distributors like CBC APPENDIX 3: Questions of interview section Questions 38 Do you think that a BUM should have chemical background? About market orientation? Why? What is importance of BUM for new business development? Do you think salespeople have to deal price with suppliers? Solve problems when they are behind budget? APPENDIX 4: Sales process 39 40 No KEY PERFORMANCE INDICATOR (KPI) Description A Company Objectives: 15% Implementation of sales forecasting Weighted 15% Definition & Scale Roll out & full implementation **Portfolio contribution 80/20 rule apply Portfolio required by business After October partner apply After July Before end July Before end Jun Before end Jun, Meeting target accuracy measure B Business Unit/Department Objectives: 20% New business development 20% New business contribution%- Income growth OM Contribution over actual sales *New business defined as sales from new supplier portfolio, added 15; 4>8; 5>12 business from new customers within allocated BUs C Individual Objectives: 65% 41 Business growth-stock sales growth 20% Working capital management: ADD 15% Customers- Topline customers retention 15% Growth in %over prior year 110; 3>20; 4>40; 5>70 Days improvement over prior year 1>+1; 2=+1; 4=-2, 5=-5 *lost equal no repurchase within months Nos Clients 1=1; 2=; 3=; 5=0 **Customers to be defined apply ing 80/20 rule end 2014 end ranking by income ***Ex-stock business only Time management a minimum of 10 tasks must be allocated 15% Timely execution of task allocated thru MS Outlook: 190%; 5=100% Total 100% Appendix 5: KPI Evaluation form 42 APPENDIX 5-1 BEHAVIOURAL ATTRIBUTES Referred For Non Sales with No Direct Reports (PDF-R01) No Details INTEGRITY: Conduct business with high ethical standards and be honest in all external relationships PASS/FAIL* INITIATIVE: Demonstrate inclination to initiate, rather than to react Initiates individual or group projects, and takes compete responsibility for their success Proactive when carrying out tasks and not depending solely on direction from the supervisor COMMITMENT: Perform to the maximum capability to ensure that responsibilities tasks are completed effectively and efficiently CONFIDENTIALTY: Understand confidentiality of employee information Maintain and adheres to organizational confidentiality policies Know how to keep the company related data confidential TEAMWORK&COOPERATION: Offer and support to co-workers Establishes and maintains effective relations Works effectively with other team member to help compete goals and deliverables Shares relevant or 43 Weighted None useful information Works cooperatively in group situations CUSTOMER SERVICE ORIENTATION: Provides high quality service Respond promptly to service requests Meets commitments to customers Looks for long-term benefits to the customers ATTITUDE OF SAFETY: Protects self; others and environment through attitude of safety Helps others make safe choices Keeps required safety certifications and documentation current Operates equipment in a safe and prudent manner Practices good housekeeping in all work areas Immediately reports accidents to supervisors ANALYTICAL ABILITY: Is able to work on complex problems where analysis of situation data requires indepth evaluation of various factors Looks for root causes to a problem Synthesize complex of diverse information Sets priorities for tasks in order of importance Total 44 APPENDIX 6: Job description of Business Manager of Brenntag Company  Purpose of Position The business manager is an internal role performing sales and marketing functions in a campaign driven environment, to technically promote our principle’s offering and ensure the seamless transfer of business development opportunities to the relevant Brenntag business unit / conversions of sales opportunities at the appropriate time during the sales process  Responsibilities / Accountabilities Responsible for providing returns on Marketing & Sales Campaigns: - Delivering high volume/rate of calls - Maintain a sales plan for each campaign, monitoring and mapping time scales and actions required to achieve the pre-defined campaign KPI targets including conversions - Manage short term sales campaigns focusing on converting product range to maximize volume and GP growth - Identify and progress sales opportunities / pipelines at speci fied customer datasets - Market map customer’s requirements for a speci fic product application, progress the pipeline through to Negotiation and Awarded (ultimate conversion) where appropriate - Liaise with and work closely with the relevant assigned depots to ensure customer requirements are fulfilled efficiently and effectively - Conduct market evaluation/market mapping for potential new specialty principals - Analyze and interpret commercial and market data, including time-sensitive and pertinent market information on market trends and competitors - Prepare sales, supplier and market reports based on the information obtained through campaigns, present findings 45 -  Negotiate in a strong and focused manner Documentation and Communication - Use current systems to document customer contact and market information - Communicate sales leads, customer queries and problems across the business - Communicate effectively internally and externally  Qualifications Required - Bachelor’s or equivalent degree in business studies - Qualification in chemicals desirable  Experience & Knowledge Essential: - Experience of working within a sales/ target driven environment - Experience dealing with customers/ developing customer relationships ideally within the Chemical industry or similar B2B environments - Consultative/T echnical Sales process knowledge - Strong commercial skills and sales techniques - Strong internet research skills - Computer proficient - Ability to communicate clearly and effectively over the phone Desirable: - Experience in telesales - Experience in food / cosmetics/ cleaning / pharmaceutical /other chemicals - Relationship management 46 APPENDIX 7: Questions and answers of customers about Sales manager’s evaluation Customer Questions Happy Care Are you satisfied when working with - CBC’s BUM? Answer because we met him once when We don’t remember him clearly handover from Ms Tram After that he hasn’t visited us - It is very tired when we ordering goods because of late response My Hao Are you satisfied when working with - CBC’s BUM? always keeps silent and leave job to When he goes with suppliers, he supplier to discuss with us It seems that he stand to observe communication between us Ngu A Chau Are you satisfied when working with - CBC’s BUM? goods increased sharply I called After Ms Tram left, price of all him to consider price and need more support But he didn’t reply anything We are tired with CBC’s service 47 APPENDIX 8: Questions and answer of suppliers Supplier Questions Answer Stepan Are you satisfied to work with CBC’s - He avoids responsibility when I BUM? request him to make appointment with customers for me, or answer about losing business - It seems that he doesn’t know anything and lazy to sell goods Takasago Are you satisfied to work with CBC’s - He doesn’t know about market BUM? and chemical , so he is not confident to develop our products Dow chemical Are you satisfied to work with CBC’s - He forecast and tell unrealistic BUM? things because he doesn’t know about market 48 References Annie C, Norman P, Kuang-Peng H Managing salespeople strategically when promoting new product Incorporating market orientation into a sales management control framework Industrial Marketing Management 2015;47;147-155 Chris JN Sales management Great Britain: Butterworth-Heinemann; 1998 Dawn RD, Karen NK, Daniel JG Understanding sales manager effectiveness Linking attributes to sales force values North-Holland 2002;31(7);617-626 Fatima S Work overload, work-family conflict, family-work conflict and their effects on job embeddedness: The moderating role of coworker support IOSR Journal of Business and Comment [m 1]: Management 2014;16(1);75-80 Comment [ATP N2]: Gary D Human resource management 13th ed Florida: Pearson; 2013 George JA, Nikolaos GP Exploring the influence of sales management practices on the industrial salesperson: A multi-source hierarchical linear modeling approach Journal of Business Research 2007;60(7);765-775 Iain AD, Lynette JR The effectiveness of key account management practices Industrial Marketing Management 2014;43(7);1182-1194 Javier MC, Saturn, TAP, et al Implementing key account management: Intraorganizational practices and associated dilemmas Industrial Marketing Management 2014;43(7);1216-1224 Jeff T, Earl H, Robert E, et al Sales management 2nd ed New Jersey: Pearson Prentice Hall; 2009 10 Luanne K Signs of an overloaded employee Chrone [Internet] Available from: http://work.chron.com/signs-overloaded-employee-5921.html 49 Comment [m 3]: 11 Lena H, Susi G Interpersonal influence strategies in complex B2B sales and the sociocognitive construction of relationship value Industrial Marketing Management 2015;49;139150 12 Malcolm MD, Diana W Key account management: The definition guide 3rd ed United Kingdom: John Wiley & Sons; 2011 13 Remko VK Supplier relationship management How your key supplier drives your company’s competitive advantage [document on the Internet] PWC; 2013 [cited 2016 September 01] Available from: https://www.pwc.no/no/ /pwc-supplier-relationship- management.pdf 14 Rodrigo G Top management involvement with key accounts: The concept, its dimensions, and strategic outcomes Industrial Marketing Management 2014;43(7);1146-1156 15 Sarissa A, Fluer B, Merel P Supplier relationship management (SRM) Research 2012-2013: Solution Analysis and Business Insights [document on the Internet] Capgemini Consulting; 2012 [cited 2016 September 1] Available from: https://www.capgemini.com/resources/supplierrelationship-management-srm-research-2012-2013-solution-analysis-and-business 16 Spiros G, Nektarios T Relational key account management: Building key account management effectiveness through structural reformations and relationship management skills Industrial Marketing Management 2014;43(7);1110-1123 50 51